I research, write about innovation, privacy and reputation via my books and articles, and work on it with clients as president of Arcadia, a communications research, design & delivery lab focused on today's most important, cutting-edge issues. I have 30+ years of professional experience working at big ad/PR agencies and at major brands, and I'm a Senior Fellow Emeritus at the Smithsonian's National Museum of American History.

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Marlboro Shows The Way Forward For Pepsi Brand Strategy

Soda pop consumption in the U.S. has fallen for the 8th straight year, dropping by 1.2% in 2012 to its lowest level since 1987. First lady Michelle Obama is leading a national charge to get kids to stop drinking it, and New York Mayor Michael Bloomberg wants to limit consumption legislatively. Alternatives to soda are cranking on as many sales cylinders as there are flavor options, from sports drinks and flavored waters, to energy drinks and teas.

So it was surprising to me that Pepsi just last week named a global chief marketing officer who 1) has no experience in the beverage business, but rather has done things like cut entertainment tie-ins for fashion brands, and 2) will be tasked with “thinking about how Pepsi continues to be the brand in the cola category that reinvents things and excites people with new ideas,” according to one interview.

But then it hit me: The soda category is the 21st century’s cigarette industry. Whether talking to a pack-a-day smoker or daily Big Gulp drinker, the branding challenge is to reaffirm the choices of existing customers versus making pitches to new ones. That’s why it makes sense for Pepsi to hire a marketer who excels at things like “engagement” and “culture” instead of “selling products.”

You can’t separate soda pop or cigarette branding from the context of the 20th century. Both were originally considered good for you, whether dispensed via pharmacy fountains or recommended by doctors to calm nerves. Then, as the economy and culture empowered people to express themselves, soda pop and smoking were marketed as quick, rewarding ways to do so. Mass media allowed brands to claim symbolic abstractions of happiness, independence, and success, and then repeat that positioning in evermore creative and compelling ways. The functional benefits of sugar, caffeine, and nicotine were inescapable, but people tended to choose one brand over another because of the images associated with them.

Those days are long gone.

Obesity is our century’s lung cancer. It’s a self-inflicted outcome of consumption choices. Like cigarettes and cancer, the functional benefits of drinking soda pop are a contributing cause (though not consistently or only). Granted, there aren’t warning labels on soda pop cans, limits on where or how they can be advertised, or special sin taxes levied on them…yet…it’s just not cool to regularly drink soda pop like it used to be, similarly to the way cigarettes lost their panache over time. Without the convincing power of mass media to tell consumers otherwise, the associative benefits of drinking soda seem to be slowly going the way of those of smoking.

So the marketing challenge is to keep a shrinking audience of customers using those products. Cigarette brands, most notably Marlboro, have shown the way forward for this branding strategy, which involves three core components:

Sponsorship. Buying entertainment properties and events that promote lifestyle while avoiding any claims of benefits lets brands talk directly to core consumers without, well, saying much of anything. So, like Marlboro sponsored Formula One racing (R.J. Reynolds did NASCAR), Pepsi is already spending oodles for the privilege of having pop star Beyonce not sell soda pop in ads (Coke is dropping major coin on Taylor Swift).

Merchandising. Since your product may have negative associations, creationg merch that might otherwise have benefits gets your branding across without overtly hyping it. Marlboro has done a brilliant job of creating jackets, hats, and other accessories for its committed customers to use (I think it’s profitable for them, so the branding pays for itself). For soda pop customers, the corollary products are things like music downloads and online games. Both Pepsi and Coke are already very active in music.

Philanthropy. Philip Morris, Marlboro’s parent company, has been literally buying goodwill for its brands for years with major contributions to the arts (even giving up space in its headquarters lobby to an art museum). Doing good works sidesteps having to make direct claims to brand benefits while, again, getting the message across. Pepsi flirted a few years ago with a campaign called The Pepsi Refresh Project that was too cute for its own good, and Coke’s recent Arctic Home campaign tried to link soda consumption with environmental protection. I’d bet there’s more coming.

Marlboro has proven that preaching to the faithful can be very lucrative, and there’s absolutely nothing wrong with selling legal products, giving money away, and enabling people who love your stuff to love it some more (Full disclosure: I smoked Marlboros for a decade and loved every minute of it).

Slowing the decline in soda pop consumption is a far different challenge than growing use. Every new can, bottle, sweetener, or other innovation may help keep customers longer, but won’t likely get at why anybody would want to drink the stuff in the first place. Neither will splashy, expensive sponsorship, merchandising, or philanthropy marketing campaigns.

Pepsi has a story to tell, and every right to tell it. The Marlboro example suggests that we already know the plot.

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